ARM tells staff it won't work with Huawei

Huawei's chip production could be in serious trouble.

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(Image credit: Image Credit: Flickr / Kārlis Dambrāns)

Donald Trump's recent decision to stop American companies from doing business with Huawei is spilling all over the world as many other firms with strong ties to the States are complying with the orders, as well.

This includes UK-based ARM, designer of the chipsets used in nearly every smartphone today, which has indicated it will stop working with the Chinese firm.

According to the BBC, the company sent out an internal memo to employees in which it says it would be complying with Trump's ban. Why? Because many of the parts ARM uses to build its chips are made in the States, and ARM believes it should remain compliant.

Therefore, the company is instructed to stop "all active contracts, support entitlements, and any pending engagements” with Huawei and its subsidiaries.

Even though Huawei builds its own chips, many of the designs it uses come from ARM, which is why analysts believe this latest development is a significant blow to the Chinese telecommunications giant.

ARM will also be losing plenty by staying compliant, given that Huawei pays a license to use some of its products.

In a statement on Wednesday it said: "ARM is complying with the latest restrictions set forth by the US government and is having ongoing conversations with the appropriate US government agencies to ensure we remain compliant. ARM values its relationship with our long-time partner HiSilicon and we are hopeful for a swift resolution on this matter."

Huawei responded by saying these 'political decisions' are at everyone's loss:

"We value our close relationships with our partners, but recognise the pressure some of them are under, as a result of politically motivated decisions," it said.

"We are confident this regrettable situation can be resolved and our priority remains to continue to deliver world-class technology and products to our customers around the world."